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By Mike Paulenoff, www.MPTrader.com
The Homebuilders ETF (AMEX: XHB) appears to have established a significant low at 8.21 on Nov 21, and already has carved out what exhibits a bullish initial upleg from 8.21 to 12.24 (11/26). The pullback into yesterday's low at 10.32 has been reversed this morning, in a powerful surge that is nearing a retest of the 11/26 high, which if hurdled should trigger additional strength towards a confrontation with the declining 50 DMA, now at 13.83. What now? My near-term work argues that for the next couple of weeks, the XHB is in a "buy the dips" set-up, on the way to 13.60/80. If the XHB pulls back later today, I will be looking to enter the long side for our model portfolio, but not here atop a 13% advance.
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
